Coinbase Backs $4.3 Million Raise for New Crypto Derivatives Exchange

The firm was founded by Jeff Byun and Henry Lee, who had previously launched a delivery startup that crypto-friendly payments firm Square acquired in part in 2017. The two have now brought some of the same investors in to back their new Blade venture.

A new cryptocurrency derivatives exchange that hasn’t yet launched has already won backing from major investors including Coinbase.

Called Blade, the exchange platform is planning to go live in a few weeks with a focus on perpetual swaps, TechCrunch reported Monday.

Aside from Coinbase, investors in the $4.3 million seed round included SV Angel, A.Capital, Slow Ventures, Twitch.tv co-founder Justin Kan and Quora co-founder Adam D’Angelo.

Blade is taking a focus on perpetuals – a derivative product like a futures contract, but has no expiry or settlement date – because they are “arguably the fastest growing segment of cryptocurrency trading”, Byun told TechCrunch.

As well as allowing traders to take a position on the future value of cryptocurrencies against the U.S. dollar, swaps can be used to make bets on the price on one cryptocurrency against another.

Blade hopes to compete against other similar offerings from rival exchanges by offering simple contracts. It’s also offering margin and settlement in the stablecoin tether (USDT), as well as leverage as high as 150x on BTC/USD and BTC/KRW.

As the Korean won pair suggests, Blade is targeting the keen crypto trading markets in Asia. U.S. investors will not be allowed to use the platform, due to local regulatory issues.

Byun told TechCrunch:

“It’s kind of a bifurcated market. Either you have exchanges like Coinbase or Gemini or Bitrex that cater to the U.S. market that are highly regulated or the exchanges that cater to the non-U.S. market that are much less regulated, but that’s where most of the volume is.”

Crypto Derivatives Platform Gets Nod From London Stock Exchange’s Software Tester

A crypto derivatives exchange has received a clean bill of health from the same software tester that vets the trading and settlement systems used by the London Stock Exchange (LSE).ZUBR, which only opened for trading in early March, said its trading software had been successfully stress-tested by Exactpro. The exchange’s high-frequency trading feature, risk management protocols and trading engine met requirements set by the software tester.

“The testing included a few milestones, such as the analysis of documentation and requirements, the development of testing scenarios, multiple rounds of testing, risk assessment and recommendations,” said Alexey Zverev, Exactpro co-founder and director, in a statement.

ZUBR is a crypto derivatives exchange aimed at professional traders using algorithmic and high-frequency trading strategies. The platform offers perpetual contracts – futures with no expiry dates – for bitcoin (BTC) and ether (ETH) with up to 20 times leverage. Based in Gibraltar, the company is looking to become regulated in Europe, although a spokesperson declined to specify where.

Established in 2009, Exactpro has tested the LSE’s trading technology since 2010. It was acquired by the exchange group in 2015, but was subject to a management buyout three years later for undisclosed terms. “LSEG remains a substantial client of Exactpro and we continue to provide services following a multi-year master services agreement,” a spokesperson told CoinDesk.

Speaking about the tests it performed for ZUBR, Exactpro concluded the exchange “met the requirements of a high-frequency trading venue,” with trade executing in microseconds even in high-demand simulations. Its risk management protocols meant the exchange could, subject to regulation, offer higher leverage options.

Exactpro recently expressed some skepticism about whether blockchain and distributed ledger technology (DLT) could replace existing financial infrastructure. Co-founder and co-CEO Iosif Itkin told CoinDesk that the technology was still very much at the prototype stage.

ZUBR was the first cryptocurrency exchange assessed by Exactpro. The company said it would “continue to collaborate with ZUBR to ensure any new technical features are fully tested.”

Leave a Reply

Your email address will not be published.